LATAM enters bankruptcy due to coronavirus, says it will keep flying
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The effects of the coronavirus pandemic on the travel industry have been particularly brutal. Several hotels have shuttered their doors temporarily or permanently while airlines have slashed routes and furloughed staff.
Now, another airline is feeling the effects of the pandemic. LATAM Airlines on 26 May filed for Chapter 11 bankruptcy protection in the United States, citing a collapse in demand and subsequent financial pressures caused by COVID-19”, the airline said in an infographic detailing the filing.
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“We are looking ahead to a post-COVID future and are focused on transforming our group to adapt to a new and evolving way of flying”, Roberto Alvo, LATAM Airlines Group CEO, said in a statement, “with the health and safety of our passengers and employees being paramount”.
The statement says the airline will continue flying, paying its employees, meeting benefit obligations, and paying critical suppliers. LATAM says it will also honour LATAM Pass miles and flight reservations.
Bloomberg reports the airline just over $1 billion cash on hand.
The filing comes just weeks after South American carrier Avianca filed for Chapter 11 protection, citing an 80% decline in revenues due to the coronavirus pandemic, as we previously reported. Avianca’s scheduled passenger operations have been suspended since mid-March due to COVID-19.
Delta last year purchased 20% of LATAM Airlines — a then a member of the carrier’s alliance competitor, Oneworld. Since then, LATAM has begun building its new partnership by announcing several new flights and opening a new lounge, intended to feed LATAM connections in Miami, an airport dominated by American Airlines.
Delta SkyMiles members can now earn and redeem miles for travel on LATAM. Additionally, LATAM customers will be able to earn and redeem miles on Delta-operated flights.
Featured image courtesy of Brendan Dorsey / The Points Guy
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